Correlation Between Kaman and Astronics

Can any of the company-specific risk be diversified away by investing in both Kaman and Astronics at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Kaman and Astronics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kaman and Astronics, you can compare the effects of market volatilities on Kaman and Astronics and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Kaman with a short position of Astronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaman and Astronics.

Diversification Opportunities for Kaman and Astronics

0.0

Correlation Coefficient

Kaman  Astronics

Pay attention - limited upside

The 3 months correlation between Kaman and Astronics is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Kaman and Astronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astronics and Kaman is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Kaman are associated (or correlated) with Astronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astronics has no effect on the direction of Kaman i.e., Kaman and Astronics go up and down completely randomly.

Pair Corralation between Kaman and Astronics

If you would invest  1,580  in Astronics on December 29, 2024 and sell it today you would earn a total of  887.00  from holding Astronics or generate 56.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Kaman  vs.  Astronics

Kaman

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kaman has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy primary indicators, Kaman is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Astronics

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Astronics are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Astronics displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kaman and Astronics

The main advantage of trading using opposite Kaman and Astronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaman position performs unexpectedly, Astronics can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Astronics will offset losses from the drop in Astronics' long position.

The idea behind Kaman and Astronics pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.